While European junk bonds don't provide as much yield as they have in the past, the quest for yield still leaves debt-ridden European nations as a viable option to invest in. The fact of the matter still remains that government bonds from Spain, Italy, Greece, and others provide long-term yield.
The risk on these bonds is still there, but with yield in today's bond market becoming more difficult to find, there's still nothing quite like junk bonds. The situation in Western and Southern Europe appears to be getting even worse, particularly for Eurozone nations. Spain's unemployment is at 27% and around 50% for youths. The same problem is occurring in Italy, although in a less dramatic fashion.
Junk bonds have been making news recently as investors have been selling off junk bonds in masses. While the prices on these bonds is higher than before, investors will be hard pressed to find yield quite like that of the government junk bond field. It is important to note that these bonds are extremely risky considering the state of Europe and its bleak future prospects.
But don't dismiss junk bonds quite yet. Investing in these depends on how risk-averse you are. The fact remains that for aggressive investors, this could be a very profitable payoff.
Friday, June 7, 2013
What To Invest In Today: REIT's
The biggest thing investors are looking for today is long term payoffs with profit coming along the way. As bond yields have decreased and Treasury bonds are providing close to no real interest, the question remains, "What should I invest in these days?"
One of the most profitable investments today are REIT's. This stands for Real Estate Investment Trusts. These aren't traditional investments that one makes. In fact, it's characterized as an alternative investment. But in the world of yield and dividends, REIT's are one of the best investments out there.
What is an REIT? It is considered a security that just like any other equity that is invested in real estate. The beauty of an REIT is that it is a dividend paying security that is must pay the shareholders. As the real estate market has boomed and rebounded from its lows in the aftermath of the financial crisis, investors are seeing the payoff as dividends are flowing in and real estate prices continue to rise.
The crash of the real estate market made people reluctant to invest in real estate, but REIT's through mutual funds can be a great form of steady income in a rebounding real estate market.
One of the most profitable investments today are REIT's. This stands for Real Estate Investment Trusts. These aren't traditional investments that one makes. In fact, it's characterized as an alternative investment. But in the world of yield and dividends, REIT's are one of the best investments out there.
What is an REIT? It is considered a security that just like any other equity that is invested in real estate. The beauty of an REIT is that it is a dividend paying security that is must pay the shareholders. As the real estate market has boomed and rebounded from its lows in the aftermath of the financial crisis, investors are seeing the payoff as dividends are flowing in and real estate prices continue to rise.
The crash of the real estate market made people reluctant to invest in real estate, but REIT's through mutual funds can be a great form of steady income in a rebounding real estate market.
May Jobs Report Bolsters Stock Market
The May jobs report came out today indicating the creation of 175,000 jobs in the United States by employers in the month of May. By the conclusion of the trading day on Friday, the DOW had risen by 207 points to close at 15,248. This has created an even bigger bubble within the stock market.
Yet, the increase in jobs also meant an increase in the unemployment rate as the labor force increased, signaling more out of work individuals are seeking work. The figure rose from 7.5% to 7.6%. But clearly the jobs report was a positive for the US economy. The jobs report beat the forecast that analysts had predicted, which is partly why the markets went up.
However, the positive jobs report was a double edged sword for the economy. While the growth in jobs and businesses is a step in the right direction, the market is further setting itself up for burst as the equities frenzy continues. The question is when will investor fears mount enough that there be a selloff. That remains to be seen.
Yet, the increase in jobs also meant an increase in the unemployment rate as the labor force increased, signaling more out of work individuals are seeking work. The figure rose from 7.5% to 7.6%. But clearly the jobs report was a positive for the US economy. The jobs report beat the forecast that analysts had predicted, which is partly why the markets went up.
However, the positive jobs report was a double edged sword for the economy. While the growth in jobs and businesses is a step in the right direction, the market is further setting itself up for burst as the equities frenzy continues. The question is when will investor fears mount enough that there be a selloff. That remains to be seen.
Saturday, May 18, 2013
Turkey: The New Emerging-Market Investment
We all know about the BRIC's countries that spread like wildfire in the early to mid-2000's when they were dubbed as the next big Emerging-Markets. Now that these countries have been seen in more of a light, investors are looking into what the next big investment could be.
A great argument can be made for Turkey. It recently got two investment-grade ratings, including one from Moody's, which in 1994 had downgraded Turkey into the junk-status category. Turkey has a lot of positives going for it, which should help it out. It has great demographics, a low debt to GDP ratio, and a low budget deficit. All these factors are the recipe for growth going forward. Also, interest rates have been cut to 4.5% by the Central Bank of Turkey.
The three things Turkey does need to work on is lowering its current account deficit, lowering inflation levels, and making its exchange rate to become more competitive.
However, the future looks positive for Turkey. Many investment firms and hedge funds have been dubbing Turkey as an emerging market to look into. The question is how far can Turkey go? Is it a country that investors should bet big on or simply place a stake into? As of now, the consensus is that Turkey will experience growth in the future. No doubt, it's a country that investors are looking into to see what kind of returns they can get.
A great argument can be made for Turkey. It recently got two investment-grade ratings, including one from Moody's, which in 1994 had downgraded Turkey into the junk-status category. Turkey has a lot of positives going for it, which should help it out. It has great demographics, a low debt to GDP ratio, and a low budget deficit. All these factors are the recipe for growth going forward. Also, interest rates have been cut to 4.5% by the Central Bank of Turkey.
The three things Turkey does need to work on is lowering its current account deficit, lowering inflation levels, and making its exchange rate to become more competitive.
However, the future looks positive for Turkey. Many investment firms and hedge funds have been dubbing Turkey as an emerging market to look into. The question is how far can Turkey go? Is it a country that investors should bet big on or simply place a stake into? As of now, the consensus is that Turkey will experience growth in the future. No doubt, it's a country that investors are looking into to see what kind of returns they can get.
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